Brussels, 23/07/2001 (Agence Europe) - In its latest report on car prices, which resumes the situation as it stood on 1 May 2001, the Commission notes that there are still major price differences for new cars within the EU. In its general conclusions, it stresses that, despite the recent depreciation of the British pound, prices of new cars remain higher in the United Kingdom than in euro-zone countries. Greece (which has been part of the euro zone since 2 January this year), Finland, Spain, the Netherlands and Denmark, which is not a member of the euro zone either, are markets where the pre-tax prices of cars are generally the lowest. The report shows price differentials of more than 30%, and even as much as 50% for certain models. These major differences concern the best-selling models such as Opel Corsa (37.4%), Renault Clio (31.6%), Volkswagen Golf (33.1%) and Open Astra (51.6%).
The report compares the prices practised by 17 European manufacturers (compared to 15 as before) and 8 Japanese makers on 1 May 200 for the 81 best-selling models. The report shows that:
1) Germany for a certain number of models, and Austria, are the most expensive markets. In Germany, 46 models out of 81 have a price exceeding 20% more than the price practised on at least one other market of the euro zone (including Greece).
2) The price of new cars has fallen or remained stable in the United Kingdom. This market, however, remains the most expensive for 52 of the models considered. Compared to the situation on 1 November 2000, the prices of 18 models sold in the United Kingdom came down by over five percentage points. Nonetheless, as the prices on the other side of the Channel are still far higher than the other Member States, many British consumers continue to buy their cars on the continent. The Commission, moreover, is still often solicited by British consumers who complain they are confronted by obstacles when they purchase a vehicle in another Member State.
3) The generally low prices before tax in Finland, Denmark and Greece is largely linked to the makers' price policies. Given the considerable taxes on the purchase of vehicles in these countries, most manufacturers fix their catalogue prices before taxes at a low level so that the prices after tax are still affordable. On the other hand, in countries such as Germany where taxes are not as high, the level of prices before taxes is generally higher.
Commenting on the report, Commissioner Mario Monti responsible for competition stressed, above all, that "the monitoring of both new car price differentials and possible obstacles to parallel trade in new cars remain a high priority for the Commission, in particular in view of the current preparation of the future legal framework for car distribution". EUROPE recalls that, in the context of the future system applicable to automobile distribution, which is to be set in place early October 2002, the Commission is currently examining market developments very closely in order to assess how valid the system is. The main question is that of determining whether there are still valid reasons to extend the exemption to competition rules granted to the automobile sector under the system in force. It is of no surprise that makers and dealers recommend extension of the current exemption dispensing them from applying competition rules in the strict way provided for in the Treaty. The consumer associations, with BEUC in the lead, consider, on the other hand, that the current system runs counter to the rules of free competition given the market-sharing and the artificially high prices.
Furthermore, reacting to the publication of this report, ACEA (European Automobile Manufacturers Association) has published its own conclusions stating that the allegation that specific distribution arrangements in the motor vehicle sector lead to high price differences is manifestly unfounded. "The price differences for cars in the EU are smaller than for other consumer goods", it says. According to the calculations made by the association, price differentials between the average prices of models reported to the Commission were less than 9% and even less than 7% within the euro zone while these differences are 12% for other consumer goods. The criticism that the exemption currently granted to the automobile sector engenders high price differences is thus "manifestly unfounded", concludes the ACEA.
The condensed electronic version of the Commission's report and the manufacturers' price ranges are available on the Internet at the following address: http: //europa.eu.int/comm/competition/car_sector/.